Table of Contents
Executive Summary
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- Impact of COVID-19 on hotels
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on hotels, 1 December 2020
- The market
- Domestic leisure stays will begin recovery in 2021 but inbound revival will be slower
- Supply reduction and permanent loss of business travel will keep volumes below pre-COVID levels over the next five years
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- Figure 2: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2015-25
- Figure 3: Total value forecast of hotel/motel/guesthouse nights (domestic and inbound), 2015-25
- Companies and brands
- Top 10 UK hotel groups are led by Premier Inn
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- Figure 4: Top 10 hotel operators in the UK, by estimated UK site numbers, December 2020
- Branded chains are growing their market share
- The post-COVID hotel
- The consumer
- Budget and mid-market hotels are equally popular
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- Figure 5: Type of hotel used for last visit, September 2020
- Pent-up demand for mini-breaks
- Hotels will have to work hard to win back the business traveller
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- Figure 6: Purpose of last hotel stay, September 2020
- A third of adults would stay in a hotel before the pandemic is fully resolved
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- Figure 7: Percentage of those feeling ‘comfortable’ about staying in a hotel, July-November 2020
- Health & safety is vital while COVID remains a threat but hotels need to strike a balance
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- Figure 8: Preferred health & safety measures when booking a hotel, September 2020
- The great escape
- Room as cocoon
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- Figure 9: Preferences and behaviours when staying in a hotel in the next six months (continued), September 2020
Issues and Insights
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- Automation and the post-COVID hotel
- The human touch
The Market – Key Takeaways
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- 2020 crash followed record high in 2019
- Regions to lead the recovery in 2021
- The budget sector is likely to grow its market share as the economic fallout from COVID takes effect
- Closures and reduced pipelines are likely to delay recovery
- End of free movement will bring staffing problems
Market Size, Segmentation and Forecast
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- Domestic leisure demand will kick-start recovery in 2021
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- Figure 10: Short-, medium- and long-term impact of COVID-19 on hotels, 1 December 2020
- Revenue growth up 19% in four years before COVID
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- Figure 11: Total volume and value of UK hotel/motel/guesthouse stays, 2015-20
- Inbound travel was the main engine of growth
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- Figure 12: Volume and nights of domestic stays in a hotel/motel/guesthouse in Great Britain, and volume and nights of inbound stays in a hotel/guesthouse in the UK, 2015-20
- Business travel had already slowed prior to the pandemic
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- Figure 13: Volume of domestic stays in a hotel/motel/guesthouse in Great Britain, and volume of inbound stays in a hotel/guesthouse in the UK, by purpose, 2016-19
- Hotels have lost an estimated 70% in revenue in 2020
- Regions to lead recovery in 2021
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- Figure 14: Hotel performance measurements (actual, estimate & forecast), London and UK regions, 2019-21
- Impact of recession: 2008-09 versus 2020-21
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- Figure 15: Volume of domestic and inbound hotel/motel/guesthouse stays, 2008-12
- Stays are still expected to lag pre-COVID levels in 2025
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- Figure 16: Total volume and value of UK hotel/motel/guesthouse stays, 2015-25
- Forecast charts
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- Figure 17: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2015-25
- Figure 18: Total value forecast of hotel/motel/guesthouse nights (domestic and inbound), 2015-25
Market Background
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- The COVID-secure hotel
- The contactless hotel
- End of free movement will create more challenges for a recovering hotel sector
- More staff, less staff?
- Or better rewarded/motivated staff?
Companies and Brands – Key Takeaways
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- Premier Inn & Travelodge lead the top 10
- Branded share has risen but the market remains fragmented
- Post-pandemic consolidation is likely
- COVID legacy trends
- New concepts and launches
- Premier Inn and Hilton are the strongest brands in Mintel’s research
Market Share
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- Premier Inn and Travelodge are the leading UK hotel groups
- IHG, Best Western and Accor are the next biggest
- Hilton is the largest full-service/upscale group
- OYO sees an opportunity in the unbranded budget sector
- Marriott, Wyndham and Britannia are the remaining top 10 brands
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- Figure 19: Top 10 hotel operators in the UK, by estimated UK site numbers, December 2020
- Branded market share rose by nine percentage points over the last decade…
- …and COVID will accelerate this trend
- Further consolidation is likely as the industry emerges from the pandemic
Launch Activity and Innovation
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- Luxury ‘nearcations’
- WFH (Work From Hotel)
- Aparthotel trend
- In-room wellness
- In-room entertainment
- New launches/concepts
Brand Research
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- Airbnb usage still lags behind the big hotel brands
- Brand engagement is low across the industry
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- Figure 20: Key metrics for selected brands, November 2020
- Hotel usage demographics
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- Figure 21: Previous usage of hotel brands, by socio-economic group and household income, November 2020
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- Figure 22: Previous usage of hotel brands, by generational group, November 2020
- Hilton scores highly on differentiation and trust combined
- But Premier Inn is the most trusted brand overall
- Mid-market brands struggle to stand out
- Airbnb has the clearest brand identity but has trust issues
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- Figure 23: Key attitudes towards selected brands, November 2020
- Premier Inn has a wider appeal than Travelodge
- Hilton is seen as worth paying a premium for
- Innovation is Airbnb’s core strength but hotels are still ahead on value
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- Figure 24: Further attitudes, by brand, November 2020
- Mid-market brands can offer an affordable luxury alternative
- Premier Inn is seen as more fun than other brands
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- Figure 25: Brand personality – macro image, November 2020
- Premier Inn and Hilton have the strongest brands overall
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- Figure 26: Brand personality (continued) – micro image, November 2020
The Consumer – Key Takeaways
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- Millennials like to splash out on luxury
- Pent-up demand for mini-breaks
- 35% of consumers are likely to consider staying in hotels before the pandemic has ended
- Health & safety priorities
- Luxury escape
- Renewed focus on the room experience
Impact of COVID-19 on Consumer Behaviour
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- COVID concern levels have plateaued around 50%
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- Figure 27: Level of concern* about COVID-19, March-November 2020
- Travel plans remain on hold despite positive vaccine news
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- Figure 28: Holiday booking and intentions, August 2019-November 2020
Hotel Usage
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- Two thirds of adults have stayed in a UK hotel over the past three years
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- Figure 29: Usage of overnight accommodation in the past three years, September 2020
- The pandemic has affected hotels more than rental brands
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- Figure 30: Percentage of those feeling comfortable about travel activities, July-November 2020
- Under-45s are currently the most comfortable about staying in a hotel…
- …but the vaccination roll-out could change this
Types of Hotel
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- Budget & mid-market hotels are equally popular
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- Figure 31: Type of hotel used for last visit, September 2020
- Older guests prefer mid-market comforts
- Millennial travellers are willing to splash out on occasional luxury
- 17% of £75K+ income households stayed in a luxury hotel on their last trip
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- Figure 32: Type of hotel used for last visit, by socio-economic group and household income, September 2020
Purpose of Stay
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- Leisure mini-breaks are the mainstay of the domestic market
- One in five guests take leisure breaks of more than three nights
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- Figure 33: Purpose of last hotel stay, September 2020
- Mini-break market will rebound from COVID but some business travel may never return
Hotel Usage and Intentions During the Pandemic
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- Hotels have seen half the normal number of UK guests in 2020
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- Figure 34: Timing of last hotel stay, September 2020
- Around 35% of adults would consider staying in a hotel during the ‘final’ COVID phase
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- Figure 35: Interest in staying in a hotel in the next six months, September 2020
- Half of those reluctant to return are put off by health & safety measures
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- Figure 36: Reasons for not wanting to stay in a hotel in the next six months, September 2020
Preferred COVID-19 Health & Safety Measures
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- The key measures to reassure guests
- The ‘germ-aware’ traveller could be here to stay
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- Figure 37: Preferred health & safety measures when booking a hotel, September 2020
- Women prefer a more visible health & safety approach
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- Figure 38: Preferred health & safety measures when booking a hotel, by gender, September 2020
- Under-45s are more comfortable with low-contact hotels
Current Preferences and Behaviours when Staying in a Hotel
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- R rate remains a key factor
- Last-minute booking will be the norm for some time
- COVID-secure and COVID-lite
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- Figure 39: Preferences and behaviours when staying in a hotel in the next six months, September 2020
- Younger generations are more likely to trust branded hotels
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- Figure 40: Agreement with the statement ‘I’m more likely to trust the health & safety procedures at a branded hotel chain than an independent hotel’, by age and gender, September 2020
- Luxury escapees
- Pent-up demand for special occasion breaks
- Cocooning
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- Figure 41: Preferences and behaviours when staying in a hotel in the next six months (continued), September 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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